FCC defends its “trojan horse” approach to net neutrality

EFF and Verizon worry about the legality of net neutrality.

Almost two years ago, the Federal Communications Commission (FCC) adopted a lite version of network neutrality in its "Open Internet" order. That order is now under legal attack from Verizon, which argues that it exceeds the agency's authority. Congress has never explicitly given the FCC the authority to enforce network neutrality, but the FCC contends that the power to mandate Internet openness is implicit in other powers Congress has granted to the agency.

This "ancillary jurisdiction" argument has been greeted with skepticism not only by Verizon, but also by the network neutrality supporters at the Electronic Frontier Foundation (EFF). EFF has warned that the FCC's argument is a "trojan horse" that could be used down the road to justify unilateral FCC regulation of topics such as online indecency or even piracy.

A long fight

The FCC's authority to enforce network neutrality regulations has been a topic of debate for the better part of a decade. In 2006, Congress considered, but did not enact, regulations explicitly authorizing the FCC to protect network neutrality.

When Comcast was caught interfering with BitTorrent traffic, the FCC tried to use its own 2005 "Internet policy statement" as a basis for punishing the company. But even though Comcast modified its behavior, courts later ruled that the principles announced in that statement weren't legally binding because the FCC hadn't conducted a formal rule-making process. In other words, they were merely "advice."

So in 2010, the FCC finally adopted a formal Open Internet Order that created an actual "rule" regarding network neutrality, though it granted broad discriminatory leeway to wireless networks. This too was challenged. Last year, Verizon asked the courts to rule that the FCC had exceeded its rulemaking authority.

The concept of network neutrality hadn't been invented yet when Congress last overheauled telecommunications law in 1996. But the FCC points to several different provisions of telecommunications law that it says justify its regulations. The centerpiece of its argument is Section 706 of the Telecommunications Act, which instructs the FCC to "encourage the deployment" of "advanced telecommunications capability."

Verizon has argued that this provision isn't relevant, since the Open Internet Order focuses on the management of existing broadband services, not the deployment of new ones. And Verizon has contended that, if anything, network neutrality regulations will discourage the deployment of new broadband networks by tying their owners up in red tape.

But in its Monday filing, the FCC argued that network neutrality rules actually promote the deployment of broadband access:

Historically, the Commission found, demand for Internet-based services has "led to major network improvements." The record showed that "the increasing availability of multimedia applications" (such as YouTube, Netflix, and Hulu) "helped create demand for residential broadband services," and that broadband providers "responded by adopting new network infrastructure, modem technologies, and network protocols." A paper by economist Nicholas Economides, submitted by Google, similarly concluded that preserving an open Internet "will be highly beneficial" in preserving consumer demand-driven investment in broadband infrastructure.

In other words: protecting the open Internet will increase innovation. More innovation will make broadband connections more valuable. That will increase demand for broadband service and spur the deployment of more broadband connections. So network neutrality regulations are, indirectly, a scheme for increasing broadband deployment—just as the law requires.

A "triple cushion shot"

Verizon has ridiculed this line of argument as a "triple cushion shot" which the FCC can use to get just about anywhere it wants on the regulatory billiard table. And the company hasn't been alone in raising concerns. In a blog post last year, the EFF also warned that accepting the FCC's argument "would give the FCC pretty much boundless authority to regulate the Internet for whatever it sees fit."

For example, suppose the FCC decided it wanted to regulate online indecency. If it could come up with a plausible explanation for how such regulation would increase demand for broadband connections—maybe more parents would sign up for access to a smut-free Internet!—then the FCC could regulate online indecency without explicit Congressional approval. The EFF draws a parallel to the FCC's (thankfully thwarted) efforts of a few years back to force television manufacturers to respect a "broadcast flag." In that case, the courts ultimately ruled that the design of televisions was beyond the FCC's authority.

"While promoting network openness may somehow result in the building of new infrastructure—laying more fiber, etc.—the suggestion that regulating the Internet is 'ancillary' to the effective performance of the FCC's 706 responsibilities is a stretch, and seems far beyond what Congress intended with this section," the EFF wrote last year.

The FCC's latest brief makes similar "ancillary jurisdiction" arguments about several other areas of FCC authority. For example, Congress has told the FCC to promote competition in the telephone market. The FCC argues that network neutrality rules could be interpreted as a way to shield VoIP services from anticompetitive behavior by incumbents. Similarly, Congress has given the FCC the authority to protect competition in video markets; the commission suggests that this authority could extend to enacting the Open Internet rules, allowing "over the top" Internet video services like Netflix to compete without interference from Internet providers who offer their own TV packages.

But these arguments seem legally shaky. There's little doubt that the FCC has the authority to protect network neutrality in certain situations. For example, few objected in 2005 when a small telephone incumbent, Madison River Communications, was penalized by the FCC for preventing its DSL customers from using VoIP applications; the incident had an obvious connection to the FCC's authority over the telephone market.

But the FCC's new Open Internet rules aren't limited to telephone incumbents or to VoIP applications. So while authority over telephone services might justify some types of network neutrality regulations, it seems unlikely to justify the broad regulations the FCC has actually adopted.

The best and clearest way to adopt network neutrality regulations would be to have Congress actually change the law. But network neutrality supporters tried and failed to get a law enacted back in 2006. Since then, Congress has become even more polarized and gridlocked, making current prospects for passing new telecommunications regulations even dicier.

If the FCC's Open Internet order comes crashing down, so does all real hope of general neutrality regulations on Internet access. But if it survives the court challenge, the orders's legal underpinnings could pave the way for future actions that its backers loathe as much as a discriminatory Internet.

Timothy B. Lee
Timothy covers tech policy for Ars, with a particular focus on patent and copyright law, privacy, free speech, and open government. His writing has appeared in Slate, Reason, Wired, and the New York Times. Emailtimothy.lee@arstechnica.com//Twitter@binarybits

@bonewah Perhaps letting government agencies claim whatever power they like is the consequence of a deadlocked Congress that is unable to pass new laws or change old laws? At least the bureaucrats are getting something done.

@bonewah Perhaps letting government agencies claim whatever power they like is the consequence of a deadlocked Congress that is unable to pass new laws or change old laws? At least the bureaucrats are getting something done.

Could we stop it with the Twitter-style @names? It's not bad in this case, but I've seen in it long threads where it's damned annoying.

The problem with the "bureaucrats ... getting something done" is the manner in which they're doing it. If it works, it could have follow-on consequences worse than a continuing net-neutrality battle. The two hopes I can see are that either this shakes something loose in congress, or the SCOTUS rules in such a way to limit the application of this.

As good an idea as net neutrality is, the EFF is right here. You cant let government agencies just claim whatever power they like without regard to the rules. Good intentions, road to hell, etc etc.

Agreed. We need to begin to organize online communities that care about this and cooperate with large internet services and possibly content providers (strange bedfellows politics can make) to work on educating voters and Congress about the issues. We may need a new marketing direction as well, since 'net neutrality' has become a fairly poisoned term. Something like 'Internet freedom'.

Why hasn't the FCC just stated that all Internet communications fall under similar rules as voice communications and made ISPs common carriers yet? They'd be legally barred from paying any mind as to the contents of the call and where it's coming from or going to.

@bonewah Perhaps letting government agencies claim whatever power they like is the consequence of a deadlocked Congress that is unable to pass new laws or change old laws? At least the bureaucrats are getting something done.

Unelected rule by fiat of is better than the slow clanking of democracy? Really? I think you're letting you distaste for Verizon cloud your judgement. There are more important things than making the trains run on time.

Why hasn't the FCC just stated that all Internet communications fall under similar rules as voice communications and made ISPs common carriers yet? They'd be legally barred from paying any mind as to the contents of the call and where it's coming from or going to.

Is there a reason they can't do this?

Standardization and optimization of law is good, but broad-brush-stroking the law has gotten us into trouble so far.

EG: (not to beat Jamie Thomas Rasset into the ground, but) we get a small-time p2p music downloader charged under bootlegging laws as if they were running a massive knock-off operation, and thus told to pay $220k in damages for the equivalent of shoplifting and letting some friends listen to the cd you stole.

While I think it's just a profit-grab by big telco to keep acting like phone, tv, internet, etc are different "services" when all they turn out to be are data piped across lines, I do think there should be separate rules for how wireless, ISP, telephone, etc are regulated and operated. Maybe they're very similar, but I think there's enough differences to suggest such.

I just wish they'd hurry up and resolve this stupidity. We're given this amazing gift of communication in the 21st century, and all most folks can do is bitch & fight about how to be greedy over it.

Not funny to deal with a single instance that simultaneously acts as legislator, prosecutor and judge.

Network neutrality, does this also encompass the free access to contents from the end users, i mean without censoring.In other words, not a one way online contents regulations : Providers >> Consumers.

But network neutrality supporters tried and failed to get a law enacted back in 2006. Since then, Congress has become even more polarized and gridlocked, making current prospects for passing new telecommunications regulations even dicier.

Just to be clear, there was a period from 2008 to 2010 where the Congress was definitly not polarized and gridlocked. I wonder why network neutrality supporters didn't get it enacted during that time. Or did they try and fail then too?

2. SCOTUS issues a nuanced, reasoned & eminently equitable ruling that affords the same ends that would result were the 1st option to be realized, while restricting the FCC ability to usurp more authority. ODDS IN FAVOR - What....from THIS court???....Pass that joint over here!

3. President O'Bama were to publicly declare that throttling any vestige of neutrality in networks has become the 1st priority of his administration. Republicans would immediately pass legislation which provides the purest imaginable structures for safeguarding NN. ODDS IN FAVOR - FAR more likely than either option 1. or 2. (except that O'Bama hasn't exactly embraced the concept).

I'd very much like to read what Alexis de Tocqueville would have to write concerning this Grand Experiment of ours, circa 2012.

But network neutrality supporters tried and failed to get a law enacted back in 2006. Since then, Congress has become even more polarized and gridlocked, making current prospects for passing new telecommunications regulations even dicier.

Just to be clear, there was a period from 2008 to 2010 where the Congress was definitly not polarized and gridlocked. I wonder why network neutrality supporters didn't get it enacted during that time. Or did they try and fail then too?

Well, GOP filibuster threats still made it somewhat gridlocked. I'm sure there were some NN proposals floating around at the time but I don't think any got as much consideration as in the 2006 debate. One reason, I think, is that Congress was waiting to see what the FCC would do.

Why hasn't the FCC just stated that all Internet communications fall under similar rules as voice communications and made ISPs common carriers yet? They'd be legally barred from paying any mind as to the contents of the call and where it's coming from or going to.

Is there a reason they can't do this?

There is no legal reason why they couldn't reclassify broadband services as Title II common carriers. This would be perfectly within their current powers (as granted by Congress). However, they got a lot of flack from Republicans when they started talking about doing so, and were worried that such a drastic move might motivate Congress to revoke some of that authority. Instead they decided to go with this boneheaded, legally unfounded approach to Network Neutrality.

I'm no fan of Tim Wu, but I like his idea of separating content from transport. For telco DSL, there is a natural division. The problem is, the FCC bought into the cable companies' bogus argument that their cable-modem service was an integrated whole that could not be separated. That is just horse-dung.

Coax delivers both cable TV as well as Internet. It can deliver either one, or both. Cable TV is not necessary for Internet access, and Internet access is not needed for cable TV. The one thing both have in common is the coax. Hence the coax is obviously a transport facility, separate and apart from the services delivered over it. Same for FiOS, U-Verse, etc.

The FCC needs to reverse its 2005 decision finding that cable modem service was an Information Service. It should find that cable modem service comprises an underlying transport medium, subject to Title II as well as an Information Services component (i.e., the broadband Internet access service itself).

Then it should reverse its DSL decision and go back to the original transport (Title II Telecom component) + broadband Internet access (Information Service) model.

Carriers claim they can't deploy broadband profitably if they are required to "line-share" their facility. I'd like to see some evidence of that. If they truly cannot deploy fiber profitably under line-sharing, then let the government do it and lease third-party Internet access to all comers.

What has all of this to do with NN? I think with multiple ISPs competing for your business, NN won't be needed. The first time an ISP messes with you, you can take your business elsewhere just as in the dial-up days.

I'm generally a free marketer "corporatist" but this silliness has to stop. I think it is within the FCC's power to do all of the above under the Communications Act as it exists today.

As good an idea as net neutrality is, the EFF is right here. You cant let government agencies just claim whatever power they like without regard to the rules. Good intentions, road to hell, etc etc.

Yes, but businesses having the unregulated right to do whatever the hell they want isn't any better. We need a balance and we need Congress to stop being such pantywaists on this issue and spell out clearly and concisely what businesses and the FCC can do and what they cannot do.

Title II common carrier is clearly how Cable and FIOS should be re-classified yet politically is virtually impossible. The physical constraints of stringing wires through communities limits "competition" to one or two providers. Suggesting that 4G wireless is a violable alternative is to ignore the vastly slower throughput and drastically higher cost.The idea that Congress can pass any acceptable legislation regarding these matters is purely wishful thinking. So-called conservatives equate unfettered corporate latitude with spurring incentive and competition. Any mandate by the government to insist they play fair or level the playing field is construed as either some variant of communism and/or crony capitalism despite all evidence to the contrary.If the ISPs/ content providers are indulging in anti-competitive behaviors why doesn't the Federal Trade Commission step in and do the job they are obligated to do? The FCC shouldn't have to carry all the weight here!

If the ISPs/ content providers are indulging in anti-competitive behaviors why doesn't the Federal Trade Commission step in and do the job they are obligated to do? The FCC shouldn't have to carry all the weight here!

That's basically the ISPs' argument -- NN isn't needed because anti-trust law can be applied to any violations. Generally I would agree with that, as far as it goes. With respect to any particular ISP, they should not be able to block a competitor's content else they would run afoul of the anti-trust laws.

The problem anti-trust does not solve is the lack of choice among multiple ISPs on the same broadband pipe. There is no law requiring ISPs to offer access to non-affiliated, 3rd-party ISPs. So you're stuck with whoever owns the pipe(s).

I think the most important thing they need to focus on right now is redefining how services are grouped under laws/regulations. Accessing the internet needs its own broad classification. The same rules that govern how i access the internet at home and on mobile devices needs to be blended together ASAP. The fact they have not yet been blended is actually stalling innovation b/c as we've seen, mobile carriers are now able to compete with broadband carriers in terms of home internet service. B/c there are conflicting rules between the two types of connection, service providers are hesitant to innovate in that market b/c they are waiting to see what the regulations will actually be and then develop their business around those instead of the other way around.

I think the majority of the country has spoken out against 'smart pipes' from ISPs (which are currently prohibited for broadband carriers but not for mobile carriers). I also think tiered data plans are an excuse for mobile carriers to spend less money actually improving their networks and should be banned. Without exception, broadband carriers should be banned from tiered data and throttling data for any reason. Again, those are simply excuses to spend less money innovating ways to provide better services to their customers. Allowed to continue, their strategy right now is what will also put them out of business which will harm many consumers. But we learned from the 'too big to fail' debacle that if/when those companies (ComCast) fail, they will be allowed to die. This is exactly why this issue needs to be a big one for all consumers right now instead of down the road when their only local ISP goes out of business.

If the ISPs/ content providers are indulging in anti-competitive behaviors why doesn't the Federal Trade Commission step in and do the job they are obligated to do? The FCC shouldn't have to carry all the weight here!

That's basically the ISPs' argument -- NN isn't needed because anti-trust law can be applied to any violations. Generally I would agree with that, as far as it goes. With respect to any particular ISP, they should not be able to block a competitor's content else they would run afoul of the anti-trust laws.

The problem anti-trust does not solve is the lack of choice among multiple ISPs on the same broadband pipe. There is no law requiring ISPs to offer access to non-affiliated, 3rd-party ISPs. So you're stuck with whoever owns the pipe(s).

The anti-trust involving ISPs isn't that they are blocking each others' content, its that they are no longer expanding their service areas into territory where another ISP already has an established customer base. This is anti-competitive behavior and violates the anti-trust law. Tricky part is that the deal that 'allowed' this non-compete among 6 major providers, the "Verizon Cable-Spectrum Deal", was approved by both the FCC and the Supreme Court.

Your last paragraph is exactly why internet access needs to be considered a utility. Allowing a single company to lay piping all over cities/states is fine in principle but 2 months after company 1 is done, company 2 starts all over again, laying their own pipes right next to company 1's pipes. Roads/neighborhoods would be in an almost perpetual state of construction making room for competing service providers. Instead, one set of pipes should be laid and multiple companies must share this piping (similar to Gas, Electric, sometimes Water, phone(?), you know - utilities that we need and rely on daily, just like the internet).

On a side note, perhaps declaring internet access as a utility would end all this ridiculous talk about people being addicted to it. You don't hear much talk about people being addicted to gas, electricity or water...

If the FCC tried to regulate the internet, that would be violating net neutrality.

Net neutrality is the only thing keeping the telcoms from taking over and blocking / slowing any data that they don't want on their network, such as netflix, which of course directly competes with their own video streaming services. It would also be open season for the MAFIAA to force ISP's to add all sorts of crazy monitoring and filtering of traffic. 'The internet' needs to be treated as a utility, a dumb pipe that passively sends along whatever is sent over it.